The bid process is the process from issuing Requests for Proposals (RFPs) to selecting a preferred bidder. The quickest and simplest is a single-stage bid process, in which bidders present both technical and financial proposals, which are evaluated to select the preferred bidder.
The alternative is a two- or multi-stage bid process. Under this approach, bidders present an initial proposal, which may include comments on the RFP and draft contract, and may or may not include a financial bid. Based on these proposals, the government reviews and possibly revises the RFP and draft contract, and requests revised proposals accordingly. The government may engage in discussion with bidders to varying extent, as described below under 'Negotiation with bidders: during bidding process'. The government may also eliminate some bidders at this stage, and the revision process may be repeated more than once. Bidders then submit final proposals, including a final financial bid.
A multi-stage process can have advantages over a single-stage process for complex projects, particularly where there is room for innovation. It can help ensure solutions are aligned to needs, and improve final quality of proposals. On the other hand, the multi-stage process is longer, more complex to manage and more expensive for all parties involved. Care needs to be taken to retain competitive pressure, protect intellectual property, and maintain transparency.
The following resources provide more information on the bid process options:
• Farquharson et al [#95, pages 113-114] summarizes the advantage of sequential screening over multiple stages-improving the quality of bids
• A World Bank Technical Note on Procurement of Management Contracts [#278, pages 22-33], which describes different bidding processes and their relative advantages
• PPIAF's Toolkit for PPPs in Roads and Highways [#282] section on 'Concessions: Main Steps in competitive bidding' describes one- and two-stage bid processes.
Many countries' PPP frameworks leave open the decision of whether to use a single or multi-stage bidding process, depending on the nature of the project. Some also leave the option of asking for second bids open, as a means to resolve the problem of no clear bidder emerging from a single-stage process. For example, the South Africa PPP Manual procurement module [#219, Module 5, pages 51-52] states that a single-stage process with a clear winner is preferred, but that a 'best and final offer' may be requested from two or more bidders. Table 3.3: Examples of PPP Procurement Procedures provides further examples.